FICC
One macro framework for rates, FX, credit, and commodities, helping investors connect cross-market signals and position with clarity and conviction.
The dollar’s early 2025 decline was a reflection of a global rush to hedge accumulated USD exposure, not a mass exodus from US assets. With most hedging now complete, currency moves should again follow fundamentals, setting the stage for a tactical USD rebound in the months ahead.
Commodity market breadth would need to improve for it to signal bullish conditions for the aggregate commodity complex. We maintain a defensive tilt within commodities, favoring precious metals over the more cyclically sensitive energy and industrial metals.
Despite concerns about fiscal sustainability, a rise in term premia, and attacks on central bank independence, monetary policy remains the primary driver of bond markets. In our Q3 Review & Outlook, we update our views and identify opportunities in government bonds, short-term interest rate futures, global yield curves, inflation-linked bonds, and credit.
We remain cyclically short Brent but are tightening the stop loss to $73/bbl to guard against a geopolitics-driven upside break.
Monetary policy divergences are re-emerging. We rely on BCA’s Central Bank Monitor to assess the current policy stance of major central banks, and highlight the tactical opportunities across bond markets and currencies.
The Fed is mispriced for the rest of 2025. We explain why the dollar is poised to rebound and the trades to position for it.
Median Fed unemployment rate projections are overly optimistic. The Fed will end up cutting more in 2026 than it currently anticipates.